Retailers may be hardest hit by Sandy

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American Airlines agent Maura Kelly waited to help passengers with canceled flights in a nearly empty terminal B at Logan Airport.

By Casey Ross
Globe Staff
October 29, 2012

Hurricane Sandy threatened to erase a second day of business activity Tuesday, closing US stock markets, soaking roads and railways across the region, and causing many companies to tell employees to stay home again rather than risk a hazardous trip to the office.

As the storm battered the East Coast, employers scrambled to stay on top of conditions that were worsening by the minute. Although the extent of physical damage was difficult to assess, many businesses were certain to take hits in revenue and production.

Total economic losses from the storm could be up to $20 billion, according to an analysis by Eqecat, which performs catastrophe risk modeling for insurers and the government. But the overall damage to the US economy may be minimal.

‘‘Assuming the storm simply disrupts things for a few days and it doesn’t do significant damage to infrastructure, then I don’t think it will have a significant national impact,’’ said Mark Zandi, chief economist at Moody’s Analytics.

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The hardest hit sector will likely be retail, as stores in Massachusetts and along the East Coast face billions of dollars in losses from closures, spoiled food, and property damage. And insurance companies were bracing for a surge in claims.

“We’re just expecting a flurry of property losses,” said Mark Levine, an executive vice president for Eastern Insurance Group. “It will be all hands on board.”

The closing of financial markets on Tuesday is the first time trading in the United States has been halted for two consecutive days due to weather since the great blizzard of 1888. Boston mutual fund manager Putnam Investments said its offices will likely be closed Tuesday. Bank of America said branches in Massachusetts and Rhode Island and along the Eastern Seaboard will be closed Tuesday, while other financial firms were still monitoring the storm Monday night before deciding whether to remain closed.

KAYANA SZYMCZAK FOR THE BOSTON GLOBE

Passengers waited for trains and buses at North Station in Boston on Monday morning.

Sandy forced hospitals and health care providers to juggle the demands of their patients with those of employees, especially after the MBTA system closed Monday afternoon with only a few hours warning. At Beth Israel Deaconess Medical Center in Boston, executives activated a system developed for winter storms that helps to make sleeping arrangements for employees who might not be able to get home, said hospital spokesman Jerry Berger. He said other employees were being encouraged to leave early if possible.

“The bottom line is the hospital is not closed,” Berger said. “But we’re making arrangements to allow employees who are dependent on the T to go home. And we’re looking to find sleeping accommodations for the people who have to be here.”

Meanwhile people in the real estate industry worried the effects of the hurricane could linger for days as homes that were in the midst of a sale may have to undergo a second inspection or appraisal if they sustained damage, said Trisha McCarthy, president of the Massachusetts Association of Realtors.

By noon Monday, a stubborn insistence to stay open on the part of many Massachusetts businesses gave way to prudence, as managers decided to send home employees and shutter operations. The storm cast an eerie silence across the region’s major commercial centers in the hours before the storm reached its peak. Skyscrapers in the Back Bay and Financial District were mostly empty by Monday afternoon, and the streets in Boston were quiet.

Many companies said employees were able to work easily from home. But hundreds of bank branches were closed around the state, as were major shopping centers. Simon Property Group closed Copley Place, the Mall at Chestnut Hill, and South Shore Plaza midday Monday; several other stand-alone stores and retail centers opted not to open. Even Walmart was forced to close stores in Connecticut due to an order from the state government, although all its stores in Massachusetts remained open.

Bill Wertz, a Walmart spokesman, said the retail giant is trying to replenish staples such as milk, bread, water, batteries, and propane. “There is a lot of heavy shopping,” he said.

The storm is also hitting the region at a bustling time for the construction industry, forcing builders to scramble to secure sites. In Manhattan, the twisted arm of a crane at an apartment building site dangled dangerously 80 stories above midtown, forcing New York officials to cordon off a multiblock area and evacuate nearby buildings.

In Boston, officials at Suffolk Construction said they were especially concerned about the upper floors of properties under development, and began as early as last Wednesday to secure towers under construction on the South Boston Waterfront, Downtown Crossing, and elsewhere.

“It’s the gusts of wind that are challenging,” said Suffolk chief executive John Fish. “Once you get up to the 12th, 15th, or 27th story, it becomes very difficult to control.”

Meanwhile some businesses took advantage of the disruptions from Sandy to woo customers. Restaurants and bars rolled out food and drink deals to draw customers, with Strega Waterfront on Fan Pier offering 15 percent off food bills at the bar and Sel del la Terre in the Back Bay launching a $1 oyster special along with a $9 cocktail called “Stormy Nights.”

The storm was also a boon for companies that make their living on Internet traffic. Twitter, Facebook, and other social media venues were overflowing with postings and pictures about Sandy. The free texting service HeyWire, which is run by the Cambridge start-up MediaFriends Inc., reported a 19 percent jump in daily texting activity on Monday among its users on the East Coast. Photo messaging jumped 21 percent, and the number of users sending tweets rose 16 percent.

Akamai Technologies Inc., which is responsible for managing about 30 percent of all the traffic on the Internet, said it was open Monday with a crew monitoring its network operations command center in Cambridge, where the company keeps track of more than 100,000 computer servers around the world.

“Just because people aren’t at work doesn’t mean their use of the Internet goes down at all,” said Akamai spokesman Jeff Young. “The folks that work at our network operations center are there 24-7.”

Todd Wallack, Michael B. Farrell, Jenn Abelson, Robert Weisman, and Jenifer B. McKim of the Globe staff contributed to this report. Material from the Globe wire services was also used. Casey Ross can be reached at cross@globe.com.